Decentralizing Centralized Matching Markets: Implications from Early Offers in University Admissions

Julien Grenet, YingHua He and Dorothea K\"ubler

Papers from arXiv.org

Abstract: The matching literature often recommends market centralization under the assumption that agents know their own preferences and that their preferences are fixed. We find counterevidence to this assumption in a quasi-experiment. In Germany's university admissions, a clearinghouse implements the early stages of the Gale-Shapley algorithm in real time. We show that early offers made in this decentralized phase, although not more desirable, are accepted more often than later ones. These results, together with survey evidence and a theoretical model, are consistent with students' costly learning about universities. We propose a hybrid mechanism to combine the advantages of decentralization and centralization. Published at The Journal of Political Economy under a new title, ``Preference Discovery in University Admissions: The Case for Dynamic Multioffer Mechanisms,'' available at https://doi.org/10.1086/718983 (Open Access).

Date: 2021-07, Revised 2022-06
New Economics Papers: this item is included in nep-des and nep-exp
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Published in Journal of Political Economy, June 2022, Volume 130, Number 6, pp. 1427 - 1476

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Related works:
Working Paper: Decentralizing Centralized Matching Markets: Implications From Early Offers in University Admissions (2019)
Working Paper: Decentralizing centralized matching markets: Implications from early offers in university admissions (2019)
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